Alstom and Siemens’s planned rail merger appeared to be increasingly in danger of collapse, with the French company warning of a possible block by European antitrust regulators and its former German rival said to be considering alternatives for its business.

“It’s a very frustrating moment for us. We’ll fight until the end,” Alstom CEO Henri Poupart-Lafarge said on a call with analysts on Thursday. The French equipment maker said in a statement that its attempts to render the deal more palatable to the European Commission may come up empty.

Siemens and Alstom submitted on December 12 so-called remedies to alleviate European concerns about future competition in the region and then improved on them amid talks with the commission, Alstom said. The assets proposed for disposal, mainly rolling stock and signaling activities making up about 4 percent of sales of the planned new company, are “appropriate and adequate.”

For its part, Siemens is preparing for the possibility that the deal will be scuttled, and would consider all other options for its train division including a listing and acquisitions, according to a person familiar with the matter. The proposed assets for sale are as much as the companies can bear while still making the deal worthwhile, another person said. Both asked not to be named as the information isn’t public.

A collapse of the deal would be a significant setback for the German and French former rivals who have said the resulting European rail champion would be able to fend off competition from China. With combined sales of about €15-billion ($17-billion), the planned entity has support from Germany and France, although opposition has been growing in recent weeks.

PUBLIC CRITICISM
Rail network operators called on the commission to veto the deal, while several member country competition authorities took the rare step of publicly criticizing the companies’ concessions as insufficient.

Siemens and Alstom were said to be considering adding sweeteners to their package of assets for sale in a last-ditch effort to gain antitrust approval from the commission, Bloomberg News reported Wednesday. The German and French train equipment suppliers’ new offerings include possible contract extensions and patents and were being discussed with antitrust officials and potential bidders.

The French government on Wednesday continued to ratchet up pressure on the commission not to scuttle the plan, which has to be decided on by Feb. 18.

“It would be a political mistake and an economic error,” Benjamin Griveaux said at his weekly press conference in Paris. “It would also send a bad message to the people of Europe” because the block of countries has so far “failed to protect its people” in the face of global competition.

Siemens’ rail business, which had about 8.8 billion euros in revenue in the 2018 fiscal year, has been carved out of the company in preparation for the merger. The manufacturer is examining ways to expand the business beyond rail mobility, and in the long-term is interested in areas such as autonomous cars and buses, the people said.

Alstom shares fell 0.2 percent at 10:55 a.m. in Paris while Siemens stock was down 0.6 percent in Frankfurt.